There are many chapter 7 bankruptcy laws you need to be aware of if you find yourself in the situation of needing to file for this. While it is certainly advisable to hire a good lawyer to help you sort through it all, this article will give you a basic understand of chapter 7 and if it applies to your situation or not.
Keep in mind that chapter 7 is the most popular form of bankruptcy to file for in America, and this is because when most people file for bankruptcy, they are in as situation where they cannot easily get out of it.
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This could be because of unsteady income, huge levels of debt, and other factors, but in any case, this is what they will need to apply for. How does chapter 7 help you relive your debt?
Very simply, it liquidates all your non exempt assets in order to pay off your creditors. Once you've sold the assets, the money is distributed among your various creditors, depending on their status and whether they are secured or unsecured.
The secured ones always go first, and the non secured creditors essentially get the scraps, if there is anything left over.
Obviously, this sounds like a bad situation, and it can be for a little while, but the best part about it is that all of your debt is completely exonerated. You don't have to worry about it anymore, even if some of your personal possessions were taken away in the process.
The best part about chapter 7 bankruptcy laws is that it doesn't matter how much debt you have-once all your non exempt assets have been sold off, everything else is taken away.
Even if you don't have enough assets to pay off everything, you are free from paying the rest. Also, all your future income is yours to keep, and none of it needs to go towards paying off your creditors.
Therefore, this form of bankruptcy can often times be better than chapter 11 or 13, despite what most people think, because it actually enables you to eliminate your debt faster, albeit at the expense of your valued possessions.
However, keep in mind that, while all your debts to creditors will be eliminated, your outstanding tax payments still need to be paid off. While you can get out of paying other companies more easily, not so with the government.
Of course, now that you know basically what chapter 7 bankruptcy laws are, how do you know if you are eligible for it?
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